American Surety Co. of New York v. Lawrenceville Cement Co.

• Decision Date: 23 August 1901
• Docket Number: 513.
• Citation: 110 F. 717
• Parties: AMERICAN SURETY CO. OF NEW YORK v. LAWRENCEVILLE CEMENT CO. et al.
• Court: U.S. District Court — District of Maine

110 F. 717

AMERICAN SURETY CO. OF NEW YORK v. LAWRENCEVILLE CEMENT CO. et al.

No. 513.

United States Circuit Court, D. Maine.

August 23, 1901

Henry C. Wilcox and Thomas L. Talbot, for complainant.

Benj. Thompson, for respondents Thos. Laughlin Co. and 83 others.

Libby Robinson & Turner, for respondent Berlin Mills Co.

Bird &amp Bradley, for respondents F. N. Temple and A. E. Keizer.

Frank &amp Larrabee, for respondents Thomas Carlin's Sons.

Payson & Virgin, for respondents Thos. R. Allen and Enos B. Allen.

Wm. H Looney, for respondent McKiernan Drill Co.

Turner & Connellan, for respondents Snowdell and 8 others.

PUTNAM Circuit Judge.

This is the same cause in which an opinion was passed down on July 17, 1899. 96 F. 25. The complainant executed a bond as surety for William Morgan, a contractor with the United States, subject to the provisions of the act approved August 13, 1894 (28 Stat. 278), by virtue of which one condition of the bond was that Morgan should 'promptly make payments to all persons supplying him' 'labor and materials in the prosecution of the work provided for' in his contract. Morgan failed to make such payments, and failed to complete his contract; and the result is that the demands made on the complainant by the United States, and by the persons who allege that they furnished labor and materials within the provisions of the statute and the bond, exceed the penal sum of the complainant's obligation. The complainant was sued in this district, and also in other circuits, and, expressing itself as willing to pay the penal amount of its obligation, asked the aid of this court, by its bill in equity filed in this cause, in ascertaining to whom payments should be made, and in what amounts. The court, in its previous opinion, concluded to hold the bill, and marshal the claims so far as it was in its power so to do. The bill was held to be ancillary to the suits pending in this court and within this district; but other creditors than those who commenced such suits have been properly allowed to intervene, and have been heard before the master, who was appointed by an interlocutory decree entered in accordance with the previous opinion. That decree directed the master to determine the nature and amount of the various claims against Morgan for labor performed and materials furnished in the prosecution of his contract, estimating the same, so far as concerned the United States, and so far as the parties had not submitted to the jurisdiction of this court, in such manner as would enable us to make a primary distribution that will not jeopardize the complainant. The master's report 8 has been made, and is now before the court, to be heard on various exceptions, which will be disposed of in this opinion. The report shows that the United States have made a claim, by suit at common law in this court against the complainant, for $11,440.86, which they maintain is protected by the bond in litigation. The United States have not submitted to the jurisdiction of the court in this cause, so that on that account only a primary distribution can be decreed at present. The master's report also shows that, aside from the claim of the United States, there are no claims against the complainant as surety, except of those who are parties to this bill, or who have intervened as already stated.

In using the expression which we have quoted from the statute and the bond, there can be no question that congress had somewhat in mind statutes in various states giving liens on buildings and other property, real and personal, for labor and material. Nevertheless, this statute does not have the same aspect as the ordinary lien statutes referred to, and therefore the latter can afford only very general assistance with reference to the construction of the former. The ordinary lien statutes have been justly and strictly held to cover only what has added to the value of the property against which the lien is asserted, and therefore they are ordinarily administered to protect only what is actually incorporated into its substance. The underlying equity of these statutes requires them to be so limited in their application. Even this underlying equity is not applied with absolute strictness; as, for example, with reference to a bill of lumber sold to one erecting a building, no distinction is made between those portions of it which are actually incorporated into the walls and those portions used in temporary carpenters' stagings necessary to aid in construction. Such statutes commonly use expressions of this character: 'Whoever performs labor or furnishes materials in erecting, altering, or repairing a house, building, or appurtenances,'-- a form which has direct reference only to the labor or materials and the erection in which they are used; while in the statute under discussion the expression is broader, namely, 'in the prosecution of the work. ' The underlying equity of the lien statutes relates to a direct addition to the substance of the subject-matter of the building, or other thing, to which the lien attaches, while the statute in question concerns every approximate relation of the contractor to that which he has contracted to do. Plainly, the act of congress and the bond in the case at bar are susceptible of a more liberal construction than the lien statutes referred to, and they should receive it. In the one case, as in the other, the dealings of the person who claims the statutory security must approximate the work, and in the one case as well as in the other there must be a certain margin within which there will be difficulties in discriminating between what is and what is not protected. Nevertheless, we are not concluded by the decisions with reference to the ordinary state statutory liens. We can apply them only in a general way, and we are not so restricted by them as to require a construction inconsistent with the remedial purposes of the statute now in issue.

Before passing on any of the particular claims which are brought to us by the master's report, we will dispose of the general questions affecting all of them. The master has brought down interest to the date fixed by him for receiving proofs of claims, namely, January 24, 1901. It was necessary that the master should compute interest on all claims to the same specific date, in order to secure that equality among the various claims which our previous opinion pointed out to be a necessary equity as between them. If the claims, with interest to the date computed by the master, exceed the amount for which the complainant is liable on its bond, there will be no occasion for a further computation of interest; but, if the reverse is true, the final decree will direct an additional allowance of interest until the penal sum of the bond is exhausted.

Inasmuch as the case shows that the complainant has at all times been ready to discharge the entire amount of its penal obligation as soon as it could be ascertained to whom it should be paid, it cannot now be held in default, and therefore it will be entitled to be discharged on payment of the principal without interest, unless found in default at some subsequent stage of this suit.

In accordance with our former opinion, the complainant has paid into the registry in this cause an amount equal to the costs in the various actions at law, computed as therein directed; so that the decree to be presently drawn in accordance herewith will provide that the same shall be distributed to the respective plaintiffs in the various suits, except so far as it shall be determined herein that any plaintiff in any of such suits is not entitled to share in any part in the amount due on the complainant's bond. With reference to all other matters of costs, the decree to be presently entered in accordance herewith will provide that the master's fees shall be paid by the complainant, and that no other costs shall be taxed in this cause, and that all the plaintiffs in the various suits at law to which this cause relates shall be enjoined from asking for further costs in those suits, reserving, however, for future decrees, further directions as to costs, provided subsequent events shall justly entitle any party thereto.

The decree to be presently entered will perpetually enjoin the prosecution against the complainant of all suits or counterclaims with reference to any demand, or any part of any demand, which such decree rejects, and the decree thus to be presently entered will also provide that the prosecution of the common-law suits with reference to any demand, or any part of any demand, which such decree allows, shall be perpetually...